Overview

Stock markets in Sydney and Tokyo diverged as traders in Hong Kong and Seoul took the day off, while dissipating investor concerns from last week’s Kurdish independence vote pushed down oil prices.

Hot topic

In Tokyo the Topix index was flat despite the quarterly Tankan survey from the Bank of Japan showing conditions at large manufacturers had risen to their highest level in a decade.

The energy sector was off 0.8 per cent, weighed down by oil prices coming further off last week’s peak. JXTG was down 1 per cent, while rival Inpex was off 0.3 per cent. Nissan slid as much as 5.4 per cent after it temporarily suspended new vehicle registrations in Japan following the failure of domestic factories to follow agreed processes.

In Sydney the S&P/ASX 200 climbed 1.2 per cent as the materials segment climbed 1.5 per cent and energy stocks gained 1 per cent. Beach Energy led the charge with a gain of as much as 21.3 per cent after its entitlement offer to help fund its takeover of Lattice Energy saw an institutional take-up of more than 98 per cent.

Markets in Hong Kong, mainland China, South Korea and India were closed for public holidays.

Forex and fixed income

The dollar was gaining broadly in Asia trading, with the dollar index measuring the US currency against a basket of peers up 0.2 per cent at 93.28.

The Japanese yen weakened 0.4 per cent to ¥112.86 per dollar in spite of the solid Tankan results, while the Australian dollar was unmoved against its US counterpart at $0.7831.

The euro edged down 0.3 per cent to $1.1781 in Asia after the weekend’s Catalonia referendum broke decidedly in favour of independence from Spain.

Sovereign bonds were generally lower, pushing up yields. The 10-year US Treasury yield rose 3 basis points to 2.359 per cent, while that on the 10-year Japanese government bond was up 2bp at 0.068 per cent. The yield on the equivalent Australian note was flat at 2.835 per cent.

Commodities

Brent crude oil edged lower as investor concerns over last week’s Kurdish independence vote appeared to abate, with the price of the international benchmark easing 0.1 per cent to $56.72 a barrel. West Texas Intermediate, the US marker, was unchanged at $51.66.